William Hague sets out Coalition's EU policy in House of Commons

Key extracts from William Hague's speech to the Commons yesterday on the Coalition's EU policy. Hague identifies extravagant spending as main cause of Eurozone's problems and promises to support Turkish membership of EU.

The EU rebate will be protected: "We will not repeat their wretched handling of the negotiations on the current financial perspective, which saw them accept a cut of £7 billion in our rebate while obtaining nothing of substance in return."

Deregulation and freer trade is key to European prosperity: "We need to get Europe back to work, create jobs, attract investment and deal with the erosion of our long-term competitiveness. Those issues concern every member of the European Union, not just the eurozone. We will urgently make the case for the extension of the single market, better regulation that can lighten the burdens on businesses, and seizing opportunities to create freer and fairer trade between the European Union and third countries. In that context, we will particularly encourage greater economic engagement between the European Union and new, rising economic powers."

Extravagant spending is main Eurozone problem: "Deficits unaddressed or regulation that prices people out of work in some European nations are the real dangers to economic growth in the long term. When we consider the position of the countries in the eurozone that face the most severe fiscal difficulties, their problem is not insufficient state spending or insufficient regulation, but very much the opposite."

A 'referendum lock' will be introduced to ensure democratic oversign of Britain's relationship with the EU: "Both parties that form the coalition are determined to make the Government more accountable to the British people for how the EU develops, so that Bill will be introduced later this year. It will enlarge democratic and parliamentary scrutiny, accountability and control over the decisions that we make in the EU. As the House will know, it will include a referendum lock, so that no future treaty may pass areas of power or competences from the UK to the EU without the British people's consent in a referendum. The Government have already agreed that there will be no further transfer of sovereignty or powers in this Parliament in any case. The lock will also cover any proposal for Britain to join the euro. We regard that measure as essential in ensuring that the EU develops in a way that has the British people's consent."

Britain will not support gradualist expansion of EU powers: "At the spring European Council, five EU-level target areas were identified: employment; research and development; energy and climate change; education, and social inclusion. We are concerned that some, while not legally binding, may stray into the competences of member states. Some are inappropriate for the different systems and models that various member states use. That variety must be respected in creating a meaningful strategy that addresses the economic issues faced across Europe."

The EU must support more sanctions against Iran: "We remain extremely concerned about Iran's nuclear programme. Iran has failed to suspend its nuclear activities in line with UN Security Council resolutions, has shown no serious intent to discuss its programme with the international community and has failed to address the outstanding concerns of the International Atomic Energy Agency. For those reasons, we are pursuing-as we speak-new sanctions, and a draft resolution is now being discussed at the UN Security Council. The EU has agreed to take measures to accompany this process and we will work hard with our EU partners to ensure that we take strong measures that have an impact on Iran's decision making."

Support for Turkish membership: "Widening of the European Union must go along with the rigorous application of the entry criteria. The Government will continue to champion the European Union's enlargement, including to the western Balkans and Turkey. We will be assiduous in working with Ankara and other member states to resolve outstanding issues."

In conclusion:

"The last Conservative Government left a considerable legacy in the European Union: the creation of the single market; the enlargement from nine to 15 members; and the setting in train of further eastwards enlargement. I will not take away from the last Government their achievement in helping to complete that enlargement, but in other respects their legacy is to be regretted: the alienation of the British public from the EU; the failure to stand up for Britain's interests on the budget, and so on. The new Government have started as we mean to continue-with activity and energy in European affairs. We will play our role with enthusiasm, while vigorously advancing our country's interests and never taking the British people for granted."

Read the full record in Hansard.

In a commentary the BBC's Europe Editor concludes: "Like others, the foreign secretary said the main issue facing the EU was the lack of growth, which he described as "anaemic." The basic message was that Britain would be co-operative, but it would not agree to further integration."

Tim Montgomerie